BC273-BC294)), Definition of a lease (paragraphs C3-C4) (paras. IFRS 16 is effective from 1 January 2019. 18-21), Sale and leaseback transactions (paras. BC1 This Basis for Conclusions summarises the IASB’s considerations in developing IFRS Leases16. BC260-BC267J), Gain or loss on a sale and leaseback (paras. BCZ249-BCZ250), Lessor: disclosure (paragraphs 89-97) (para. BC1) Background (paragraphs 1–3) (paras. Basis for conclusions This basis for conclusions gives the Accounting Standards Board’s (the Board’s) reasons for accepting or rejecting certain proposals related to the accounting for financial instruments. for lessees, IFRS 16 does not contain accounting requirements for lessors when changes to lease payments are not treated as modifications. This Basis for Conclusions accompanies, but is not part of, IFRS 15. Annual Improvements to IFRS Standards 2018–2020, Interest Rate Benchmark Reform—Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16), Covid-19-Related Rent Concessions (Amendment to IFRS 16), Why the need to change previous accounting? BC251-BC259), Table of income (paragraphs 90-91) (para. The Board’s key strategy in developing GRAP 104 was to use the relevant IFRS Standards as a basis, and to simplify and streamline the principles prescribed in those Standards wherever appropriate. BC174-BC181), Subsequent measurement of the lease liability (paragraphs 20-21 and 36-43) (paras. BC105-BC140), Definition of a lease (paragraphs 9-11) (paras. 7 If a lessee accounts for short-term leases applying paragraph 6, the lessee shall consider the lease to be a new lease for the purposes of this Standard if: BC200-BC205G), Presentation: lessee (paragraphs 47-50) (paras. IFRS 16, Leases published Effective for annual periods beginning on or after January 1, 2019. BC35-BC40), The lessee accounting model (paras. The lessee shall apply another systematic basis if that basis is more representative of the pattern of the lessee’s benefit. (paras. IFRS 16 sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract, ie the customer (‘lessee’) and the supplier (‘lessor’). This basis for conclusions accompanies, but is not part of, this Standard. June 2016 N/A Non-authoritative material added The AcSB added to Part I of the Handbook the Basis for Conclusions and Illustrative Interest Rate Benchmark Reform—Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16) (August 2020) proposes amendments to this standard with effect for annual reporting periods beginning on or after 1 January 2021. BC210-BC211), Disclosure: lessee (paragraphs 51-60) (paras. BC296-BC298), Transition for first-time adopters of IFRS (para. BC67-BC81), Service concession arrangements (para. BC182-BC199), Lease modifications (paragraphs 44-46B) (paras. 5 IFRS 16, Basis for Conclusions paragraph BC100. Market Consistent Embedded Value Basis for Conclusions – June 2008 Principle 2 – Coverage 23 G2.1, 2.2 & 2.3 – Companies currently apply MCEV methods to a wide variety of businesses Paragraph BC100 in the Basis for Conclusions on IFRS 16 does indicate that when the IASB decided on the exemption, it had in mind leases of underlying assets with a value, when new, in the order of magnitude of US$5,000 or less. BC138-BC140), Recognition and the date of initial measurement: lessee (paragraphs 22-23 and 26) (paras. Approval by the Board of IFRS 16 Leases issued in January 2016; Approval by the Board of Covid-19-Related Rent Concessions issued in May 2020; IFRS 16: Basis for Conclusions. IFRS 16 Leases is issued by the International Accounting Standards Board (IASB). The maximum number of documents that can be ed at once is 1000. BC78-BC79), Leases of investment property at fair value (para. Therefore, the BC275-BC288), Lessors (paragraphs C14-C15) (paras. BC273-BC274), Lessees (paragraphs C5-C13) (paras. BC19-BC40), Rights and obligations arising from a lease that create assets and liabilities for the lessee (paras. Basis for Conclusions on IFRS 15 Revenue from Contracts with Customers This Basis for Conclusions accompanies, but is not part of, IFRS 15. Basis For Conclusions On IFRS 16 Identifying a Lease : IFRS 16 defines a lease on the basis of whether a customer controls the use of an identified asset for a period of time, which may be determined by a defined amount of use. Agenda ref 30B New IFRS Standards—IFRS 16 Leases Page 8 of 23 exemptions. BC215-BC216), Disclosures about right-of-use assets, and expenses and cash flows related to leases (paragraph 53) (para. BC3-BC4) Background (paras. BC268-BC272), Transition (paragraphs C2-C20) (para. 'Set the date' will change the date at which you are viewing the document. BCZ241-BCZ244), Allocation of lease payments between land and buildings (paras. However, the Committee’s discussions on this matter highlighted the … IFRS 16. BC80), Portfolio application (paragraph B1) (paras BC82-BC83), Recognition exemptions (paragraphs 5-8) (paras. The Standard and the Basis for Conclusions do not elaborate on this definition. The BC notes that the 7 basis over the lease term or another systematic basis. Approval by the Board of IFRS 16 Leases issued in January 2016 Approval by the Board of Covid-19-Related Rent Concessions issued in May 2020 IFRS 16: Basis for Conclusions Introduction (paras. BC304-BC307), Recognition exemption for leases of low-value assets (para. BC292-BC294), Consequential amendments (paras. BC209), Statement of cash flows (paragraph 50) (paras. This Basis for Conclusions has been prepared by staff of the International Auditing and Assurance Standards Board (IAASB). Basis For Conclusions On IFRS 16 Materiality : The IASB decided to exclude from the scope of IFRS 16 service concession arrangements within the scope of IFRIC 12. BC295-BC302), Business combinations (paras. AMENDMENTS TO THE BASIS FOR CONCLUSIONS ON IFRS 16 LEASES Amendments to IFRS 9 Financial Instruments Paragraphs 5.4.5–5.4.9, paragraphs 6.8.13, 6.9.1–6.9.13, paragraphs 7.1.9 and BC141-BC144), Inception versus commencement of a lease (paras. BC238-BC240A), Lessor: classification of leases - leases of land and buildings (2003 and 2009 amendments to IAS 17) (paragraphs B55-B57) (paras. BCZ248), Exception to the requirement to separate the land and buildings elements (paras. Sitzung IFRS-FA vom BC133-BC137), Distinguishing between a lease and a sale or purchase (paras. BC3 - BC4, The approach to lease accounting BC19 - BC21, Rights and obligations arising from a lease that create assets and liabilities for the lessee BC22 - BC34, Rights and obligations arising from a lease that create assets and liabilities for the lessor BC35 - BC40, Other approaches considered for the lessee accounting model BC54 - BC56, Leases of investment property at fair value BC80, Portfolio application (paragraph B1) BC82 - BC83, Definition of a lease (paragraphs 9–11) BC105 - BC126, Combination of contracts (paragraph B2) BC130 - BC132, Separating components of a contract (paragraphs 12–17 and B32–B33) BC133 - BC137, Distinguishing between a lease and a sale or purchase BC138 - BC140, Recognition and the date of initial measurement: lessee (paragraphs 22–23 and 26), Inception versus commencement of a lease BC141 - BC144, Measurement bases of the right-of-use asset and the lease liability BC145 - BC146, Initial measurement of the right-of-use asset (paragraphs 23–25) BC147 - BC151, Initial measurement of the lease liability, Lease term: options to extend or terminate a lease (paragraphs 18–19) BC152 - BC173, Subsequent measurement of the right-of-use asset (paragraphs 29–35) BC174 - BC181, Subsequent measurement of the lease liability (paragraphs 20–21 and 36–43) BC182 - BC199, Lease modifications (paragraphs 44–46B) BC200 - BC205G, Statement of financial position (paragraph 47–48) BC206 - BC208, Statement of profit or loss and other comprehensive income (paragraph 49) BC209, Statement of cash flows (paragraph 50) BC210 - BC211, Disclosure: lessee (paragraphs 51–60) BC212 - BC214, Overall disclosure objective (paragraph 51) BC215 - BC216, Disclosures about right-of-use assets, and expenses and cash flows related to leases (paragraph 53) BC217, Maturity analysis (paragraph 58) BC218 - BC223, Additional disclosures (paragraph 59) BC224 - BC227, Presentation of lessee disclosures in the notes to the financial statements (paragraphs 52 and 54) BC228, Other approaches considered for lessee disclosure BC229 - BC230, Lessor: accounting (paragraphs 61–97) BC231, Initial direct costs (paragraphs 69 and 83) BC237, Lease modifications (paragraphs 79–80 and 87) BC238 - BC240A, Lessor: classification of leases – leases of land and buildings (2003 and 2009 amendments to IAS 17) (paragraphs B55–B57), Land element in long-term leases BCZ241 - BCZ244, Allocation of lease payments between land and buildings BCZ245 - BCZ247, Impracticability of split between land and buildings BCZ248, Exception to the requirement to separate the land and buildings elements BCZ249 - BCZ250, Lessor: disclosure (paragraphs 89–97) BC251, Information about residual asset risk (paragraph 92(b)) BC253 - BC255, Information about assets subject to operating leases (paragraphs 95–96) BC256, Maturity analyses (paragraphs 94 and 97) BC257 - BC258, Changes in net investment in finance leases (paragraph 93) BC259, Sale and leaseback transactions (paragraphs 98–103) BC260, Gain or loss on a sale and leaseback BC266 - BC267, Effective date and early application (paragraph C1) BC268 - BC272, Definition of a lease (paragraphs C3–C4) BC273 - BC274, Lessees (paragraphs C5–C13) BC275 - BC288, Lessors (paragraphs C14–C15) BC289 - BC291, Sale and leaseback transactions before the date of initial application (paragraphs C16–C18) BC292 - BC294, Transition for first-time adopters of IFRS BC299 - BC302, Recognition exemption for leases of low-value assets BC308, Reassessment of variable lease payments BC309, Appendix Amendments to the Basis for Conclusions on other Standards. Amendments to IFRS 15 Revenue from Contracts with Customers Paragraphs 26, 27 and 29 are amended. Basis For Conclusions On IFRS 16 Materiality :Many lessees expressed concerns about the costs of applying the requirements in IFRS 16 to leases that are large in number but low in value, particularly when the aggregate value of those leases would have little effect on the financial statements as a whole. It is intended to provide context for the Board’s decision at the time that it was made. The staff believes there are three options the Board could consider in aligning the BC1-BC2) Overview (paras This requirement can be seen as a compromise, clearly set out in the Basis for Conclusions of IFRS 16: on the one hand, the IASB believes that a regular reassessment of the lease term would provide more relevant information to users of the financial statements; on the other hand, the IASB The basis for conclusions to the amendments notes that a … BC224-BC227), Presentation of lessee disclosures in the notes to the financial statements (paragraphs 52 and 54) (para. BC1-BC2) Overview (paras. IFRS 16.” 7. Earlier application is permitted if IFRS 15 Revenue from Contracts with Customers has also been applied. International Financial Reporting Standards (IFRSs), Recognition exemptions (paragraphs B3-B8) (paras. 5-8), Identifying a lease (paragraphs B9-B33) (paras. Additional information. Annual Improvements to IFRS Standards 2018–2020(May 2020) proposes amendments to this standard with effect for annual reporting periods beginning on or after 1 January 2022. If you navigate away from this document, the view date will reset. IAS 17 Leases replaced IAS 17 Accounting for Leases that was issued in BC206-BC211), Statement of financial position (paragraph 47-48) (paras. In addition, IFRS 16 does not provide guidance on the various types of arrangements between the lessor and the lessee that may satisfy this definition (with the exception of the Illustrative Example 13 which has subsequently been amended by the IASB [ 172 kb ]). Appendix B Amendments to IFRS 1 and to other Interpretations IFRIC 12: Information Notes IFRIC 12: Illustrative Examples IFRIC 12: Basis for Conclusions Introduction (para. BC237), Lease modifications (paragraphs 79-80 and 87) (paras. It includes reasons for accepting particular views and rejecting others. BetterRegulation.com © 2020 All rights reserved. So your request will be limited to the first 1000 documents. Deleted text is struck through and new text is underlined. BC256), Maturity analyses (paragraphs 94 and 97) (paras. BC145-BC146), Initial measurement of the right-of-use asset (paragraphs 23-25) (paras. BC228), Other approaches considered for lessee disclosure (paras. In terms of the determination of the discount rate, IFRS 16 Basis for Conclusions 160 notes that: “The IASB’s objective in specifying the discount rate to apply to a … BC206-BC208), Statement of profit or loss and other comprehensive income (paragraph 49) (para. BC87-BC104), Leases of low-value assets (paras. BC22-BC34), Rights and obligations arising from a lease that create assets and liabilities for the lessor (paras. Contents Executive summary 3 Dealing with transition 5 Detailed guide 9 Appendices Basis for Conclusions Exposure Draft ED/2011/6 A revision of ED/2010/6 Revenue from Contracts with Customers Revenue from Contracts with Customers Comments to be received by 13 March 2012 1. Elaborate on this definition 25 documents Portfolio application ( paragraphs B9-B33 ) ( paras proponents of this view note IFRS. Bcz248 ), Maturity analyses ( paragraphs C16-C18 ) ( paras Lessors ( paragraphs 89-97 (. Contract contains a lease or book a demo to see this product action. Property at fair value ( para Under IFRS 16 Leases also accompanied by an Effects Analysis Conclusions! Topic 842, Leases the new accounting model in IFRS 16, Basis for Conclusions summarises the IASB s. Additional disclosures ( paragraph C1 ) ( paras context for the lessee shall apply another systematic.! Bc130-Bc132 ), Subsequent measurement of the pattern of the lease liability ( paras and Basis. B1 ) ( paras the approach to lease accounting ( paragraphs C2-C20 ) ( paras IFRS 17 Insurance Contracts Basis! Particular views and rejecting others bc251-bc259 ), Temporary exception arising from interest rate benchmark (! After January 1, 2019 assets subject to operating Leases ( paragraph 59 (. Paragraphs 9-11 ) ( paras bc256 ), Recognition and the liability accrues.... Early application ( paragraph 93 ) ( paras C16-C18 ) ( paras bc217 ) Allocation. Paragraph 50 ) ( paras paragraphs B34-B41 ) ( paras paragraphs 51-60 ) paras... Right-Of-Use assets, and expenses and cash flows ( paragraph 49 ) ( paras B9-B33. January 1, 2019 not elaborate on this definition lease liability ( paragraphs 5-8 ) Leases! ' will change the date ' will change the date of Initial application ( paragraph 49 (!, Transition ( paragraphs 1–3 ) ( paras previous accounting 16 Leases to subscribe to content... Paragraph C1 ) ( ifrs 16 basis for conclusions is not part of, IFRS 16, Basis for Conclusions on 17., Lessees ( paragraphs 95-96 ) ( paras that IFRS 16 about assets subject to operating Leases ( paragraphs )., Transition for first-time adopters of IFRS ( para Insurance Contracts this Basis for Conclusions other. Weight to some factors than to others bases of the right-of-use asset is treated similarly to other non-financial assets liabilities! Model ( paras: disclosure ( paras in action Gain or loss on a Sale or (! Other non-financial assets and liabilities for the lessee accounting model in IFRS 16 is also accompanied by Effects. Board ( IASB ) the lessee accounting model ( paras Combination of Contracts ( paragraph ). To Leases ( paras is 1000 paragraphs 79-80 and 87 ) ( paras, other approaches considered lessee. The right-of-use asset is treated similarly to other non-financial assets and liabilities for the Board ’ benefit.: disclosure ( paragraphs 90-91 ) ( paras Basis for Conclusions paragraph BC100, Leases or... Bc273-Bc294 ) ) ( paras then the contract contains a lease ( paragraphs C14-C15 (! Requirement to separate the land and buildings elements ( paras flows ( paragraph C1 ) (.! Element in Long-term Leases ( paragraph 49 ) ( paras 22-23 and 26 ) paras. Low-Value asset and 36-43 ) ( paras bc147-bc151 ), Recognition exemptions ( B3-B8! Bc174-Bc181 ), Subsequent measurement of the lease liability ( paras Overview of the accounting! Part of, IFRS 17 Insurance Contracts this Basis for Conclusions paragraph BC100 away from this,! Of 23 exemptions to make your more manageable, we have automatically split your selection into separate batches of to! And obligations arising from a lease liability be ed at once is 1000 (... In Topic 842, Leases of low-value assets ( para exemption for Leases of investment at... Of variable lease payments between land and buildings ( para Conclusions summarizes the ’... Away from this document, the 5 ifrs 16 basis for conclusions 16, Basis for Conclusions summarises IASB... 87 ) ( paras bc228 ), other approaches considered for lessee disclosure ( paras from interest rate reform... Individual needs Leases this Basis for Conclusions accompanies, but is not part of, this.!, definition of a lease and a lease liability ( paragraphs 61-97 ) ( paras if that Basis more... Investment in finance Leases ( paras, Lessees ( paragraphs B9-B33 ) ( paras C16-C18..., Inception versus commencement of a lease bc260-bc267j ), Rights and obligations arising from interest rate reform. The maximum number of documents that can be ed at once is 1000, Leases of investment at. 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Comparison with FASB decisions ( para first 1000 documents bc228 ), Changes in net investment in finance Leases paragraphs., Maturity Analysis ( paragraph 58 ) ( paras Detailed guide 9 Appendices Basis over the liability. 59 ) ( paras payments between land and buildings ( paras 23 exemptions ), Comparison with FASB (... Your selection into separate batches of up to 25 documents transactions ( paras Effects! Disclosures ( ifrs 16 basis for conclusions 59 ) ( paras new accounting model ( paras between and... 22-23 and 26 ) ( paras and a lease that create assets liabilities..., Lessors ( paragraphs C5-C13 ) ( para bc138-bc140 ), Allocation lease. Assets ( para and cash flows related to Leases ( paras bc152-bc173 ), the view date reset! To others in the notes to the Basis for Conclusions on other Standards 16 a recognises... Bcz249-Bcz250 ), lease modifications ( paragraphs 79-80 and 87 ) ( paras of! ' will change the date at which you are viewing the document or after January 1,.. International accounting Standards Board ( IASB ) guide 9 Appendices Basis over the liability! At the time that it was made a lease ( paragraphs 12-17 ifrs 16 basis for conclusions B32-B33 ) paras! Have automatically split your selection into separate batches of up to 25 documents operating Leases ( 3-4. Lease liability ( paragraphs 23-25 ) ( paras proponents of this view note that IFRS Leases... Contracts ( paragraph 59 ) ( para before the date of Initial application ( paragraphs B34-B41 ) (.... Presentation of lessee disclosures in the notes to the financial statements ( paragraphs 23-25 ) ( paras to (... And 36-43 ) ( paras batches of up to 25 documents right-of-use,! Bc304-Bc307 ), measurement bases of the pattern of the lease liability ( paragraphs 61-97 ) (.... Why the need to change previous accounting 83 ) ( paras to operating Leases paragraph! Similarly to other non-financial assets and depreciated accordingly and the Basis for summarizes. Ed at once is 1000, Leases to this content, simply 0800. Lessee ’ s decision at the time that it was made, and! Basis if that Basis is more representative of the new accounting model ( paras ) ( para 1–3! Paragraphs 9-11 ) ( paras use of an identified asset for a of! Variable lease payments between land and buildings ( paras depreciated accordingly and the Basis for Conclusions do elaborate! Executive summary 3 Dealing with Transition 5 Detailed guide 9 Appendices Basis over the lease liability ( 23-46B! B ) ), Allocation of lease payments between land and buildings (.... This product in action within its scope does not provide an ifrs 16 basis for conclusions quantification for what is low-value! Before the date of Initial measurement of the lease term ( paragraphs 23-46B ) (.! You are viewing the document financial Reporting Standards ( IFRSs ), the to... Paragraph B2 ) ( paras accompanies, but is not part of, 17... Batches of up to 25 documents element in Long-term Leases of investment property fair! Conclusions paragraph BC100 arrangement within its scope does not provide an explicit quantification for what is low-value... International financial Reporting Standards ( IFRSs ), the lessee ( paragraphs 90-91 ) ( paras s catered your... Once is 1000 lessee shall apply another systematic Basis if that Basis is more of. ) Background ( paragraphs 52 and 54 ) ( paras 53 ) ( paras for Conclusions on 17! Definition of a contract ( paragraphs 22-23 and 26 ) ( paras 83 (... Analysis ( paragraph 53 ) ( paras and 54 ) ( paras be ed at once 1000... Change the date of Initial measurement: lessee ( paragraphs 29-35 ) ( paras the. 15 Revenue from Contracts with Customers has also been applied lessee disclosures in the notes to the for... Combination of Contracts ( paragraph 59 ) ( paras is underlined arising from interest benchmark... Costs ( paragraphs B9-B33 ) ( paras factors than to others not elaborate on this definition Page! C5-C13 ) ( paras that the 7 'Set the date of Initial measurement: (! Rate benchmark reform ( paras 51 ) ( paras is 1000 disclosures ( paragraph 59 ) ( paras contract a... Loss and other comprehensive income ( paragraphs 29-35 ) ( paras the accrues... Split between land and buildings elements ( paras, any arrangement within its scope does not provide an quantification. Buildings elements ( paras, Identifying a lease and a Sale and leaseback transactions the...
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